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What the new Labour government means for your money

Now that the dust has settled on the election we can take stock of what a Labour win will mean for your finances

FTSE 100: Nationwide building society members to get a share of £340m bonanza

Pedro Goncalves
·Finance Reporter, Yahoo Finance UK
Updated ·2-min read
File photo dated 18/4/2023 of a Nationwide Building Society bank cash machine in Sheffield. Nationwide Building Society has reported its strongest financial results on record and said it will be handing out £340 million in payments to eligible members. Issue date: Friday May 19, 2023.
Nationwide hands out £340m to customers as it reports 40% profit boost from higher interest rates. Photo: PA/Alamy (Mike Egerton, PA Images)

Nationwide (NBS.L) has revealed a £340m ($421.6m) payout to its customer base on the back of a 40% hike in annual profits.

Eligible members will get £100 each, according to Nationwide, which also announced a new 4.75% paying two-year fixed rate savings account.

The building society’s members — of whom there are 16.3 million worldwide — will be told on Friday if they are eligible to receive the cash payment in June.

As a building society, Nationwide is owned by its customer members, who are meant to benefit from profits through better rates on savings, mortgages and other products.

Read more: Era of 'massive rises' of house prices is over, expert says

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Nationwide reported a 40% jump in annual pre-tax profits to £2.2bn — a record high — up from £1.6bn a year earlier. The building society benefited from the rise in UK interest rates, which have climbed to 4.5% over the past year and allowed lenders to charge customers more for loans and mortgages.

Chief executive Debbie Crosbie said: “We have delivered a strong financial performance by providing banking that is fairer, more rewarding and for the good of society.”

Crosbie added that the transition to higher interest rates would be a strain for many households. “Nationwide remains well positioned to use its financial strength to continue to support its customers through the challenges ahead,” she said.

The building society set aside £108m for credit losses, compared to the £34m it released the previous year.

Read more: Bank of England criticised for not acting sooner to tame double-digit inflation

Across the year Nationwide said the financial benefit to members has increased to over £1bn, up from £325m last year.

It said this was “supported by our competitive mortgage and savings products; as we have passed a greater proportion of interest rate rises to savers than the market average.”

Reflecting the higher rates, its share of the deposit market grew to 9.6%, up from 9.4% last year, equalling a balance growth of £9.1bn.

The building society is the second-largest mortgage lender in the UK, and claimed to provide loans for one in seven first-time buyers last year.

Watch: Nationwide to pay £340m to customers as profits rise 40% due to rising rates

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